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  • AIG Reports Second Quarter 2022 Results

    August 9, 2022 by American International Group, Inc

    NEW YORK–(BUSINESS WIRE)–American International Group, Inc. (NYSE: AIG) today reported financial results for the second quarter ended June 30, 2022.

    AIG Chairman & Chief Executive Officer Peter Zaffino said: “AIG had another excellent quarter. General Insurance reported outstanding results and Life and Retirement again delivered a solid performance considering the significant market headwinds in the second quarter.

    “Due to the high degree of equity market volatility in May and June, we decided to defer the launch of the Corebridge Financial initial public offering (IPO). Deferring the IPO provided us with an opportunity to further accelerate progress on numerous separation initiatives and to solidify the capital structure of this business as a standalone company. Completing the IPO is a significant priority for us and we remain ready to execute, subject to regulatory approvals and market conditions.

    “General Insurance’s culture of underwriting excellence continues to be evidenced in our financial results. Meaningful top-line growth, strong renewal retention and new business, intentional improvements in business mix, rate above loss cost trends, coupled with a disciplined and focused approach to minimizing volatility, led to impressive profitability improvement.

    “The combined ratio of 87.4% represents AIG’s first sub-90 quarter in over fifteen years and improved 510 basis points year-over-year. Consistent with our strategy to manage volatility, catastrophe losses were very modest in the quarter coming in at $121 million, or 1.8 points of the combined ratio. The adjusted accident year combined ratio of 88.5% improved for the 16th consecutive quarter – totaling 1,250 basis points of improvement over this period and 2,080 basis points of improvement in Global Commercial Lines. Overall, I am very pleased with our overall performance and the momentum we have heading into the second half of 2022.

    “Life and Retirement experienced another solid quarter of sales growth in fixed annuities supported by Blackstone’s origination capabilities. Additionally, Life and Retirement is starting to see a positive impact in its base portfolio net investment income from higher interest rates and credit spreads.

    “During the second quarter, we began to transfer certain assets under management to BlackRock in accordance with our recently announced asset management arrangement. We expect the majority of the remainder of the approximately $150 billion of assets under management to be transferred by the end of 2022.

    “Lastly, certain capital management priorities were accelerated in the second quarter, including issuing $6.5 billion of Corebridge Financial debt and subsequently redeeming or repurchasing $7.6 billion in aggregate principal debt of AIG. In addition, we returned $2.0 billion to shareholders through $1.7 billion of AIG common stock repurchases and $256 million of dividends.

    “Thanks to the outstanding efforts and hard work of our global colleagues, AIG continues to drive excellence across the company that will create long-term value for all our stakeholders.”

    For the second quarter of 2022, pre-tax income from continuing operations was $4.3 billion, up from $147 million from the prior year quarter. Second quarter of 2022 net income attributable to AIG common shareholders was $3.0 billion, or $3.78 per diluted common share, compared to net income of $91 million, or $0.11 per diluted common share, in the prior year quarter. The pre-tax income increase was primarily due to an increase in net realized gains on the Fortitude Re funds withheld embedded derivative, and overall strong General Insurance underwriting results, including higher premiums earned, margin expansion, and higher favorable PYD, partially offset by lower alternative investment income. The pre-tax income increase was partially offset by income attributable to noncontrolling interest associated with Blackstone’s 9.9% interest in the Life and Retirement business, mitigated by the use of proceeds received in the transaction through debt reduction and share repurchase activities.

    AATI was $979 million, or $1.19 per diluted common share, for the second quarter of 2022 compared to $1.3 billion, or $1.52 per diluted common share, in the prior year quarter. The decrease in AATI was primarily due to lower alternative investment income, offset in part by a $336 million pre-tax increase in General Insurance underwriting results.

    Total consolidated NII for the second quarter of 2022 was $2.6 billion, down 29% from $3.7 billion in the prior year quarter, primarily due to lower alternative investment income, lower call and tender income and lower returns from fair value option equity securities. Total NII on an APTI basis* was $2.5 billion, a decrease of $678 million compared to the prior year quarter.

    Book value per common share was $58.16 as of June 30, 2022, a decrease of 16% from March 31, 2022 and 27% from December 31, 2021, reflecting a reduction in accumulated other comprehensive income (AOCI) as a result of higher market interest rates. Adjusted book value per common share* was $72.23, an increase of 2% from March 31, 2022 and 5% from December 31, 2021 reflecting growth in retained earnings from net income in excess of dividends and share repurchases. Adjusted tangible book value per common share was $66.06, an increase of 2% from March 31, 2022 and 5% from December 31, 2021.

    For the second quarter of 2022, AIG repurchased approximately $1.7 billion of common stock or approximately 30 million shares and paid $256 million of common and preferred dividends, resulting in AIG Parent liquidity of $5.6 billion as of June 30, 2022. AIG’s ratio of total debt and preferred stock to total capital at June 30, 2022 was 31.1%, up from 27.8% at March 31, 2022, principally due to the impact of higher interest rates on of AOCI.

    Today, the AIG Board of Directors declared a quarterly cash dividend of $0.32 per share on AIG common stock (NYSE: AIG). The dividend is payable on September 30, 2022 to stockholders of record at the close of business on September 16, 2022.

    The AIG Board of Directors also declared a quarterly cash dividend of $365.625 per share on AIG Series A 5.85% Non-Cumulative Perpetual Preferred Stock, with a liquidation preference of $25,000 per share, which is represented by depositary shares (NYSE: AIG PRA), each representing a 1/1,000th interest in a share of preferred stock. Holders of depositary shares will receive $0.365625 per depositary share. The dividend is payable on September 15, 2022 to holders of record at the close of business on August 31, 2022.

    FINANCIAL SUMMARY

     

     

    Three Months Ended
    June 30,

     

     

     

     

    ($ in millions, except per common share amounts)

     

    2021

     

     

    2022

     

    Net income attributable to AIG common shareholders

    $

    91

     

    $

    3,028

     

    Net income per diluted share attributable

     

     

     

     

     

     

    to AIG common shareholders

    $

    0.11

     

    $

    3.78

     

     

     

     

     

     

     

     

    Adjusted pre-tax income (loss)

    $

    1,708

     

    $

    1,359

     

    General Insurance

     

    1,194

     

     

    1,257

     

    Life and Retirement

     

    1,124

     

     

    563

     

    Other Operations

     

    (610)

     

     

    (461)

     

     

     

     

     

     

     

     

    Net investment income

    $

    3,675

     

    $

    2,604

     

    Net investment income, APTI basis

     

    3,182

     

     

    2,504

     

     

     

     

     

     

     

     

    Adjusted after-tax income attributable to AIG common

     

     

     

     

     

     

    shareholders

    $

    1,331

     

    $

    979

     

    Adjusted after-tax income per diluted share attributable

     

     

     

     

     

     

    to AIG common shareholders*

    $

    1.52

     

    $

    1.19

     

     

     

     

     

     

     

     

    Weighted average common shares outstanding

     

     

     

     

     

     

    – diluted(in millions)

     

    872.9

     

     

    800.7

     

     

     

     

     

     

     

     

    Return on common equity

     

    0.6

    %

     

    24.1

    %

    Adjusted return on common equity

     

    10.5

    %

     

    7.0

    %

     

     

     

     

     

     

     

    Book value per common share

    $

    76.73

     

    $

    58.16

     

    Adjusted book value per common share

    $

    60.07

     

    $

    72.23

     

     

     

     

     

     

     

     

    Common shares outstanding (in millions)

     

    854.9

     

     

    771.3

     

    * For the three-month period ended June 30, 2022, an option for Blackstone to exchange all or a portion of its ownership interest in Corebridge for AIG common shares was dilutive for the calculation of AATI per common share. The dilutive impact was an additional 42,572,031 shares for the period.

    The comparisons on the following pages are against the first quarter of 2021, unless otherwise indicated. Refer to the AIG Second Quarter 2022 Financial Supplement, which is posted on AIG’s website in the Investors section, for further information.

    GENERAL INSURANCE

     

     

    Three Months Ended June 30,

     

     

     

    ($ in millions)

     

    2021

     

     

    2022

     

    Change

     

    Gross premiums written

    $

    9,503

     

    $

    9,581

     

    1

    %

     

     

     

     

     

     

     

     

     

    Net premiums written

    $

    6,860

     

    $

    6,866

     

    %

    North America

     

    3,156

     

     

    3,401

     

    8

     

    North America Commercial Lines

     

    2,655

     

     

    2,918

     

    10

     

    North America Personal Insurance

     

    501

     

     

    483

     

    (4)

     

    International

     

    3,704

     

     

    3,465

     

    (6)

     

    International Commercial Lines

     

    2,062

     

     

    2,037

     

    (1)

     

    International Personal Insurance

     

    1,642

     

     

    1,428

     

    (13)

     

     

     

     

     

     

     

     

     

     

    Underwriting income (loss)

    $

    463

     

    $

    799

     

    73

    %

    North America

     

    169

     

     

    406

     

    140

     

    North America Commercial Lines

     

    162

     

     

    416

     

    157

     

    North America Personal Insurance

     

    7

     

     

    (10)

     

    NM

     

    International

     

    294

     

     

    393

     

    34

     

    International Commercial Lines

     

    218

     

     

    349

     

    60

     

    International Personal Insurance

     

    76

     

     

    44

     

    (42)

     

     

     

     

     

     

     

     

     

     

    Net investment income, APTI basis

    $

    731

     

    $

    458

     

    (37)

    %

    Adjusted pre-tax income

    $

    1,194

     

    $

    1,257

     

    5

    %

    Return on adjusted segment common equity

     

    12.3

    %

     

    12.0

    %

    (0.3)

    pts

     

     

     

     

     

     

     

     

     

    Underwriting ratios:

     

     

     

     

     

     

     

     

    North America Combined Ratio (CR)

     

    93.7

     

     

    86.3

     

    (7.4)

    pts

    North America Commercial Lines CR

     

    93.0

     

     

    83.6

     

    (9.4)

     

    North America Personal Insurance CR

     

    98.1

     

     

    102.3

     

    4.2

     

    International CR

     

    91.8

     

     

    88.5

     

    (3.3)

     

    International Commercial Lines CR

     

    88.7

     

     

    82.4

     

    (6.3)

     

    International Personal Insurance CR

     

    95.2

     

     

    96.9

     

    1.7

     

    General Insurance (GI) CR

     

    92.5

     

     

    87.4

     

    (5.1)

     

     

     

     

     

     

     

     

     

     

    GI Loss ratio

     

    61.3

     

     

    56.2

     

    (5.1)

    pts

    Less: impact on loss ratio

     

     

     

     

     

     

     

     

    Catastrophe losses and reinstatement premiums

     

    (2.1)

     

     

    (1.8)

     

    0.3

     

    Prior year development, net of reinsurance and prior year premiums

     

    0.7

     

     

    2.9

     

    2.2

     

    GI Accident year loss ratio, as adjusted

     

    59.9

     

     

    57.3

     

    (2.6)

     

    GI Expense ratio

     

    31.2

     

     

    31.2

     

     

    GI Accident year combined ratio, as adjusted

     

    91.1

     

     

    88.5

     

    (2.6)

     

     

     

     

     

     

     

     

     

     

    Accident year combined ratio, as adjusted (AYCR):

     

     

     

     

     

     

     

     

    North America AYCR

     

    92.4

     

     

    89.9

     

    (2.5)

    pts

    North America Commercial Lines AYCR

     

    91.2

     

     

    88.2

     

    (3.0)

     

    North America Personal Insurance AYCR

     

    100.1

     

     

    99.7

     

    (0.4)

     

    International AYCR

     

    90.2

     

     

    87.2

     

    (3.0)

     

    International Commercial Lines AYCR

     

    86.9

     

     

    81.4

     

    (5.5)

     

    International Personal Insurance AYCR

     

    94.0

     

     

    95.2

     

    1.2

     

    General Insurance

    • Net premiums written in the second quarter of 2022 increased 0.1% (5% on a constant dollar basis) to $6.9 billion and included Global Commercial Lines growth of 5% (8% on a constant dollar basis), reflected continued positive rate change, higher renewal retentions and strong new business production, particularly in Property. This growth was offset by a $232 million decrease in Global Personal Insurance, which had lower production in Warranty and was impacted by underwriting actions taken in Private Client Group to improve risk-adjusted returns, partially offset by growth in Travel and Personal Accident & Health.
    • Second quarter 2022 APTI increased by $63 million to $1.3 billion from the prior year quarter driven by stronger underwriting results, offset by lower alternative investment income. Underwriting income increased by $336 million and was $799 million in the second quarter of 2022, from $463 million in the prior year quarter. The second quarter of 2022 underwriting income included $119 million of catastrophe losses, net of reinsurance, compared to $118 million in the prior year quarter, which was flat year over year. During the second quarter of 2022 General Insurance had favorable net PYD of $202 million compared to favorable net PYD of $51 million in the prior year quarter.
    • General Insurance combined ratio was 87.4, a 5.1 point improvement and strong result compared to 92.5 in the prior year quarter, driven by loss ratio improvement that included higher favorable PYD. The General Insurance accident year combined ratio, as adjusted, was 88.5, an improvement of 2.6 points from the prior year quarter primarily as a result of continued earn-in of rate in excess of loss cost trends, favorable business mix and portfolio management strategy execution, resulting in a 57.3 accident year loss ratio, as adjusted*. The expense ratio of 31.2 was unchanged from the prior year quarter.
    • Commercial Lines underwriting results reflect the quality of the portfolio and its continued profitable growth. The accident year combined ratio, as adjusted, for North America Commercial Lines improved 3.0 points to 88.2, and for International Commercial Lines improved 5.5 points to 81.4 compared to the prior year quarter.
    • Personal Insurance underwriting results slightly decreased, largely reflecting mix shifts in the business as well as lower premiums in the period. The North America Personal Insurance accident year combined ratio, as adjusted, improved 0.4 points to 99.7 compared to the prior year quarter, reflecting favorable changes in business mix and strong growth in Travel premiums. The International Personal Insurance accident year combined ratio, as adjusted, deteriorated by 1.2 points to 95.2 due to an increased accident year loss ratio, driven by mix of business changes, increased claims, as well as a higher acquisition ratio.

    LIFE AND RETIREMENT

     

     

    Three Months Ended

     

     

     

     

     

    June 30,

     

     

     

    ($ in millions, except as indicated)

     

    2021

     

    2022

     

    Change

     

    Adjusted pre-tax income

    $

    1,124

    $

    563

     

    (50)

    %

    Individual Retirement

     

    617

     

    204

     

    (67)

     

    Group Retirement

     

    347

     

    164

     

    (53)

     

    Life Insurance

     

    20

     

    117

     

    485

     

    Institutional Markets

     

    140

     

    78

     

    (44)

     

     

     

     

     

     

     

     

     

    Premiums and fees

    $

    2,417

    $

    1,862

     

    (23)

    %

    Individual Retirement

     

    273

     

    267

     

    (2)

     

    Group Retirement

     

    134

     

    119

     

    (11)

     

    Life Insurance

     

    887

     

    931

     

    5

     

    Institutional Markets

     

    1,123

     

    545

     

    (51)

     

     

     

     

     

     

     

     

     

    Premiums and deposits

    $

    9,035

    $

    7,099

     

    (21)

    %

    Individual Retirement

     

    3,978

     

    3,620

     

    (9)

     

    Group Retirement

     

    2,255

     

    1,772

     

    (21)

     

    Life Insurance

     

    1,161

     

    1,157

     

     

    Institutional Markets

     

    1,641

     

    550

     

    (66)

     

     

     

     

     

     

     

     

     

    Net flows

    $

    (306)

    $

    80

     

    NM

    %

    Individual Retirement*

     

    (77)

     

    628

     

    NM

     

    Group Retirement

     

    (229)

     

    (548)

     

    (139)

     

     

     

     

     

     

     

     

     

    Net investment income, APTI basis

    $

    2,376

    $

    1,989

     

    (16)

    %

    Return on adjusted segment common equity

     

    16.4

    %

    7.6

    %

    (8.8)

    pts

    *2021 includes $0.6 billion of net outflows from Retail Mutual Funds that were transferred or liquidated in the third quarter of 2021.

    Life and Retirement

    • Life and Retirement reported APTI of $563 million for the second quarter of 2022, compared to $1.1 billion in the prior year quarter, primarily due to the impact of higher interest rates, lower equity markets, and NII. Declining equity markets together with rising interest rates and widening credit spreads drove accelerated deferred policy acquisition cost (DAC) amortization, higher policyholder reserves, and lower fee income in Individual Retirement and Group Retirement, as well as lower NII, including alternative investments returns, lower income from fair value options bonds and lower call and tender activity. Accelerated DAC amortization and increased SOP 03-1 reserves resulted in lower asset values which led to a non-cash impact of approximately $202 million compared to the prior year quarter.
    • These decreases are partially offset by less adverse mortality; the adverse mortality experience in Life Insurance is in line with the previously disclosed estimate of exposure sensitivity of $65 million to $75 million per 100,000 population deaths based on the reported second quarter COVID-related deaths in the United States.

    OTHER OPERATIONS

     

     

    Three Months Ended

     

     

     

     

     

     

    June 30,

     

     

     

     

    ($ in millions)

     

    2021

     

     

    2022

     

    Change

     

    Corporate and Other

    $

    (617)

     

    $

    (494)

     

    20

    %

    Asset Management

     

    101

     

     

    163

     

    61

     

    Adjusted pre-tax loss before consolidation and eliminations

     

    (516)

     

     

    (331)

     

    36

     

    Consolidation and eliminations

     

    (94)

     

     

    (130)

     

    (38)

     

    Adjusted pre-tax loss

    $

    (610)

     

    $

    (461)

     

    24

    %

    Other Operations

    • Second quarter adjusted pre-tax loss (APTL) was $461 million, including $130 million of reductions from consolidation and eliminations, compared to APTL of $610 million, including $94 million of reductions from consolidation and eliminations, in the prior year quarter. The improvement in APTL before consolidation and eliminations reflects lower general operating expenses and corporate interest expense as well as improvement in run-off underwriting results.
    • Before consolidation and eliminations, the improvement in APTL reflects lower underwriting loss attributable to absence of unfavorable PYD within the run-off business, lower corporate and other general operating expenses and lower corporate interest expense primarily driven by interest savings from debt redemptions and repurchases and cash tender offers.

    LIFE AND RETIREMENT SEPARATION
    On October 26, 2020, AIG announced its intention to separate its Life and Retirement business from AIG.

    On November 2, 2021, AIG and Blackstone Inc. (Blackstone) completed the acquisition by Blackstone of a 9.9 percent equity stake in Corebridge Financial, Inc., formerly known as SAFG Retirement Services, Inc. (Corebridge), which is the holding company for AIG’s Life and Retirement business. Pursuant to the definitive agreement, Blackstone will be required to hold its ownership interest in Corebridge following the completion of the separation of the Life and Retirement business, subject to exceptions permitting Blackstone to sell 25%, 67% and 75% of its shares after the first, second and third anniversaries, respectively, of the initial public offering of Corebridge (the IPO), with the transfer restrictions terminating in full on the fifth anniversary of the IPO. In the event that the IPO of Corebridge is not completed prior to November 2, 2023, Blackstone will have the right to require AIG to undertake the IPO, and in the event that the IPO has not been completed prior to November 2, 2024, Blackstone will have the right to exchange all or a portion of its ownership interest in Corebridge for shares of AIG’s common stock on the terms set forth in the definitive agreement. On November 1, 2021, Corebridge declared a dividend payable to AIG Parent in the amount of $8.3 billion. In connection with such dividend, Corebridge issued a promissory note to AIG Parent in the amount of $8.3 billion, which is required to be paid to AIG Parent prior to the IPO of Corebridge. On April 5, 2022, Corebridge issued senior unsecured notes in the aggregate principal amount of $6.5 billion, the proceeds of which were used to repay a portion of the $8.3 billion promissory note previously issued by Corebridge to AIG. While we currently believe the IPO is the next step in the separation of the Life and Retirement business from AIG, no assurance can be given regarding the form that future separation transactions may take or the specific terms or timing thereof, or that a separation will in fact occur. Any separation transaction will be subject to the satisfaction of various conditions and approvals, including approval by the AIG Board of Directors, receipt of insurance and other required regulatory approvals, and satisfaction of any applicable requirements of the Securities and Exchange Commission.

    Additionally, on March 28, 2022, AIG announced that it plans to rebrand SAFG Retirement Services, Inc., the parent company of its Life and Retirement business, as Corebridge Financial, Inc. when it becomes a public company. Also on this date, AIG and BlackRock entered into a binding letter of intent pursuant to which BlackRock will manage certain liquid fixed income and private placement assets representing up to $60 billion of assets on behalf of AIG and up to $90 billion of assets on behalf of AIG’s Life and Retirement business; AIG and AIG’s Life and Retirement business will gain access to BlackRock’s world-class asset management capabilities as well as its investment management technology, Aladdin.

    CONFERENCE CALL
    AIG will host a conference call tomorrow, Tuesday, August 9, 2022 at 8:30 a.m. ET to review these results. The call is open to the public and can be accessed via a live listen-only webcast in the Investors section of http://www.aig.com/. A replay will be available after the call at the same location.

    Additional supplementary financial data is available in the Investors section at www.aig.com.

    Certain statements in this press release and other publicly available documents may include, and officers and representatives of AIG may from time to time make and discuss, statements which, to the extent they are not statements of historical or present fact, may constitute “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are intended to provide management’s current expectations or plans for AIG’s future operating and financial performance, based on assumptions currently believed to be valid or accurate. Forward-looking statements are often preceded by, followed by or include words such as “will,” “believe,” “anticipate,” “expect,” “expectations,” “intend,” “plan,” “strategy,” “prospects,” “project,” “anticipate,” “should,” “guidance,” “outlook,” “confident,” “focused on achieving,” “view,” “target,” “goal,” “estimate” and other words of similar meaning in connection with a discussion of future operating or financial performance. These statements, may include, among other things, projections, goals and assumptions that relate to future actions, prospective services or products, future performance or results of current and anticipated services or products, sales efforts, expense reduction efforts, the outcome of contingencies such as legal proceedings, anticipated organizational, business or regulatory changes, such as the separation of the Life and Retirement business from AIG, the effect of catastrophes and macroeconomic and/or geopolitical events, anticipated dispositions, monetization and/or acquisitions of businesses or assets, or successful integration of acquired businesses, management succession and retention plans, exposure to risk, trends in operations and financial results, and other statements that are not historical facts.

    All forward-looking statements involve risks, uncertainties and other factors that may cause AIG’s actual results and financial condition to differ, possibly materially, from the results and financial condition expressed or implied in the forward-looking statements. Factors that could cause AIG’s actual results to differ, possibly materially, from those in the specific projections, goals, assumptions and statements include, without limitation:

    • AIG’s ability to continue to separate the Life and Retirement business, including through an initial public offering, and the impact separation may have on AIG, its businesses, employees, contracts and customers;
    • the effects of economic conditions in the markets in which AIG and its businesses operate in the U.S. and globally and any changes therein, including financial market conditions, fluctuations in interest rates and foreign currency exchange rates and inflationary pressures, each of which may also be affected by geopolitical conflicts, including the conflict between Russia and Ukraine;
    • the occurrence of catastrophic events, both natural and man-made, including geopolitical conflicts, pandemics, civil unrest and the effects of climate change;
    • disruptions in the availability of AIG’s electronic data systems or those of third parties, including as a result of potential information technology, cybersecurity or data security breaches due to supply chain disruptions, cyber-attacks or security vulnerabilities, the likelihood of which may increase as a result of remote business operations;
    • the effectiveness of AIG’s enterprise risk management policies and procedures, including with respect to business continuity and disaster recovery plans;
    • changes in judgments concerning potential cost-saving opportunities;
    • availability of reinsurance or access to reinsurance on acceptable terms;
    • concentrations in AIG’s investment portfolios, including as a result of our asset management relationships with Blackstone and BlackRock;
    • changes in the valuation of AIG’s investments;
    • the effectiveness of strategies to recruit and retain key personnel and to implement effective succession plans;
    • actions by rating agencies with respect to AIG’s credit and financial strength ratings as well as those of its businesses and subsidiaries;
    • changes to sources of or access to liquidity;
    • changes in judgments concerning the recognition of deferred tax assets and the impairment of goodwill;
    • changes in judgments or assumptions concerning insurance underwriting and insurance liabilities;
    • AIG’s ability to successfully dispose of, monetize and/or acquire businesses or assets or successfully integrate acquired businesses;
    • nonperformance or defaults by counterparties, including Fortitude Reinsurance Company Ltd. (Fortitude Re);
    • the requirements, which may change from time to time, of the global regulatory framework to which AIG is subject;
    • significant legal, regulatory or governmental proceedings;
    • the effects of sanctions related to the conflict between Russia and Ukraine and failure to comply therewith;
    • AIG’s ability to effectively execute on the AIG 200 operational programs designed to modernize AIG’s operating infrastructure and enhance user and customer experiences, and AIG’s ability to achieve anticipated cost savings from AIG 200;
    • the impact of COVID-19 and its variants and responses thereto;
    • AIG’s ability to effectively execute on environmental, social and governance targets and standards; and
    • such other factors discussed in Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) in AIG’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2022 (which will be filed with the SEC), and Part I, Item 1A. Risk Factors and Part II, Item 7. MD&A in AIG’s Annual Report on Form 10-K for the year ended December 31, 2021.

    The forward-looking statements speak only as of the date of this press release, or in the case of any document incorporated by reference, the date of that document. AIG is not under any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. Additional information as to factors that may cause actual results to differ materially from those expressed or implied in the forward-looking statements is disclosed from time to time in our filings with the SEC.

    COMMENT ON REGULATION G AND NON-GAAP FINANCIAL MEASURES

    Throughout this press release, including the financial highlights, AIG presents its financial condition and results of operations in the way it believes will be most meaningful and representative of its business results. Some of the measurements AIG uses are “Non-GAAP financial measures” under Securities and Exchange Commission rules and regulations. GAAP is the acronym for generally accepted accounting principles in the United States. The non-GAAP financial measures AIG presents are listed below and may not be comparable to similarly-named measures reported by other companies. The reconciliations of such measures to the most comparable GAAP measures in accordance with Regulation G are included within the relevant tables attached to this news release or in the Second Quarter 2022 Financial Supplement available in the Investors section of AIG’s website, www.aig.com.

    AIG uses the following operating performance measures because AIG believes they enhance the understanding of the underlying profitability of continuing operations and trends of AIG’s business segments. AIG believes they also allow for more meaningful comparisons with AIG’s insurance competitors. When AIG uses these measures, reconciliations to the most comparable GAAP measure are provided on a consolidated basis.

    Book Value per Common Share, Excluding Accumulated Other Comprehensive Income (Loss) (AOCI) adjusted for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets and Deferred Tax Assets (DTA) (Adjusted Book Value per Common Share) is used to show the amount of AIG’s net worth on a per-common share basis after eliminating items that can fluctuate significantly from period to period including changes in fair value of AIG’s available for sale securities portfolio, foreign currency translation adjustments and U.S. tax attribute deferred tax assets. This measure also eliminates the asymmetrical impact resulting from changes in fair value of AIG’s available for sale securities portfolio wherein there is largely no offsetting impact for certain related insurance liabilities. In addition, AIG adjusts for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets held by AIG in support of Fortitude Re’s reinsurance obligations to AIG post deconsolidation of Fortitude Re (Fortitude Re funds withheld assets) since these fair value movements are economically transferred to Fortitude Re. AIG excludes deferred tax assets representing U.S. tax attributes related to net operating loss carryforwards and foreign tax credits as they have not yet been utilized. Amounts for interim periods are estimates based on projections of full-year attribute utilization. As net operating loss carryforwards and foreign tax credits are utilized, the portion of the DTA utilized is included in these book value per common share metrics. Adjusted Book Value per Common Share is derived by dividing Total AIG common shareholders’ equity, excluding AOCI adjusted for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets, and DTA (Adjusted Common Shareholders’ Equity), by total common shares outstanding.

    Book Value per Common Share, Excluding Goodwill, Value of Business Acquired (VOBA), Value of Distribution Channel Acquired (VODA), Other Intangible Assets, AOCI adjusted for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets, and Deferred Tax Assets (DTA) (Adjusted Tangible Book Value per Common Share) is used to provide more accurate measure of the realizable value of shareholder on a per-common share basis. Adjusted Tangible Book Value per Common Share is derived by dividing Total AIG common shareholders’ equity, excluding intangible assets, AOCI adjusted for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets, and DTA (Adjusted Tangible Common Shareholders’ Equity), by total common shares outstanding.

    AIG Return on Common Equity – Adjusted After-tax Income Excluding AOCI adjusted for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets and DTA (Adjusted Return on Common Equity) is used to show the rate of return on common shareholders’ equity. AIG believes this measure is useful to investors because it eliminates items that can fluctuate significantly from period to period, including changes in fair value of AIG’s available for sale securities portfolio, foreign currency translation adjustments and U.S. tax attribute deferred tax assets. This measure also eliminates the asymmetrical impact resulting from changes in fair value of AIG’s available for sale securities portfolio wherein there is largely no offsetting impact for certain related insurance liabilities. In addition, AIG adjusts for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets since these fair value movements are economically transferred to Fortitude Re. AIG excludes deferred tax assets representing U.S. tax attributes related to net operating loss carryforwards and foreign tax credits as they have not yet been utilized. Amounts for interim periods are estimates based on projections of full-year attribute utilization. As net operating loss carryforwards and foreign tax credits are utilized, the portion of the DTA utilized is included in Adjusted Return on Common Equity. Adjusted Return on Common Equity is derived by dividing actual or annualized adjusted after-tax income attributable to AIG common shareholders by average Adjusted Common Shareholders’ Equity.

    General Insurance and Life and Retirement Adjusted Segment Common Equity is based on segment equity adjusted for the attribution of debt and preferred stock (Segment Common Equity) and is consistent with AIG’s Adjusted Common Shareholders’ Equity definition.

    General Insurance and Life and Retirement Return on Adjusted Segment Common Equity – Adjusted After-tax Income (Return on Adjusted Segment Common Equity) is used to show the rate of return on Adjusted Segment Common Equity. Return on Adjusted Segment Common Equity is derived by dividing actual or annualized Adjusted After-tax Income by Average Adjusted Segment Common Equity.

    Adjusted After-tax Income Attributable to General Insurance and Life and Retirement is derived by subtracting attributed interest expense, income tax expense and attributed dividends on preferred stock from APTI. Attributed debt and the related interest expense and dividends on preferred stock are calculated based on AIG’s internal allocation model. Tax expense or benefit is calculated based on an internal attribution methodology that considers among other things the taxing jurisdiction in which the segments conduct business, as well as the deductibility of expenses in those jurisdictions.

    Adjusted Revenues exclude Net realized gains (losses), income from non-operating litigation settlements (included in Other income for GAAP purposes) and changes in fair value of securities used to hedge guaranteed living benefits (included in Net investment income for GAAP purposes). Adjusted revenues is a GAAP measure for AIG’s segments.

    Adjusted Pre-tax Income (APTI) is derived by excluding the items set forth below from income from continuing operations before income tax. This definition is consistent across AIG’s segments. These items generally fall into one or more of the following broad categories: legacy matters having no relevance to AIG’s current businesses or operating performance; adjustments to enhance transparency to the underlying economics of transactions; and measures that AIG believes to be common to the industry. APTI is a GAAP measure for AIG’s segments. Excluded items include the following:

    • changes in fair value of securities used to hedge guaranteed living benefits;
    • changes in benefit reserves and deferred policy acquisition costs (DAC), value of business acquired (VOBA), and deferred sales inducements (DSI) related to net realized gains and losses;
    • changes in the fair value of equity securities;
    • net investment income on Fortitude Re funds withheld assets;
    • following deconsolidation of Fortitude Re, net realized gains and losses on Fortitude Re funds withheld assets;
    • loss (gain) on extinguishment of debt;
    • all net realized gains and losses except earned income (periodic settlements and changes in settlement accruals) on derivative instruments used for non-qualifying (economic) hedging or for asset replication. Earned income on such economic hedges is reclassified from net realized gains and losses to specific APTI line items based on the economic risk being hedged (e.g. net investment income and interest credited to policyholder account balances);
    • income or loss from discontinued operations;
    • net loss reserve discount benefit (charge);
    • pension expense related to lump sum payments to former employees;
    • net gain or loss on divestitures;
    • non-operating litigation reserves and settlements;
    • restructuring and other costs related to initiatives designed to reduce operating expenses, improve efficiency and simplify AIG’s organization;
    • the portion of favorable or unfavorable prior year reserve development for which AIG has ceded the risk under retroactive reinsurance agreements and related changes in amortization of the deferred gain;
    • integration and transaction costs associated with acquiring or divesting businesses;
    • losses from the impairment of goodwill; and
    • non-recurring costs associated with the implementation of non-ordinary course legal or regulatory changes or changes to accounting principles.

    Adjusted After-tax Income attributable to AIG common shareholders (AATI) is derived by excluding the tax effected APTI adjustments described above, dividends on preferred stock, noncontrolling interest on net realized gains (losses), other non-operating expenses and the following tax items from net income attributable to AIG:

    • deferred income tax valuation allowance releases and charges;
    • changes in uncertain tax positions and other tax items related to legacy matters having no relevance to AIG’s current businesses or operating performance; and
    • net tax charge related to the enactment of the Tax Cuts and Jobs Act (Tax Act).

    See page 16 for the reconciliation of Net income attributable to AIG to Adjusted After-tax Income Attributable to AIG.

    Ratios: AIG, along with most property and casualty insurance companies, uses the loss ratio, the expense ratio and the combined ratio as measures of underwriting performance. These ratios are relative measurements that describe, for every $100 of net premiums earned, the amount of losses and loss adjustment expenses (which for General Insurance excludes net loss reserve discount), and the amount of other underwriting expenses that would be incurred. A combined ratio of less than 100 indicates underwriting income and a combined ratio of over 100 indicates an underwriting loss. AIG’s ratios are calculated using the relevant segment information calculated under GAAP, and thus may not be comparable to similar ratios calculated for regulatory reporting purposes. The underwriting environment varies across countries and products, as does the degree of litigation activity, all of which affect such ratios. In addition, investment returns, local taxes, cost of capital, regulation, product type and competition can have an effect on pricing and consequently on profitability as reflected in underwriting income and associated ratios.

    Accident year loss and Accident year combined ratios, as adjusted (Accident year loss ratio, ex-CAT and Accident year combined ratio, ex-CAT): both the accident year loss and accident year combined ratios, as adjusted, exclude catastrophe losses (CATs) and related reinstatement premiums, prior year development, net of premium adjustments, and the impact of reserve discounting. Natural catastrophe losses are generally weather or seismic events, in each case, having a net impact on AIG in excess of $10 million and man-made catastrophe losses, such as terrorism and civil disorders that exceed the $10 million threshold. AIG believes that as adjusted ratios are meaningful measures of AIG’s underwriting results on an ongoing basis as they exclude catastrophes and the impact of reserve discounting which are outside of management’s control. AIG also excludes prior year development to provide transparency related to current accident year results.

    Underwriting ratios are computed as follows:

    1. Loss ratio = Loss and loss adjustment expenses incurred ÷ Net premiums earned (NPE)
    2. Acquisition ratio = Total acquisition expenses ÷ NPE
    3. General operating expense ratio = General operating expenses ÷ NPE
    4. Expense ratio = Acquisition ratio + General operating expense ratio
    5. Combined ratio = Loss ratio + Expense ratio
    6. CATs and reinstatement premiums = [Loss and loss adjustment expenses incurred – (CATs)] ÷ [NPE +/(-) Reinstatement premiums related to catastrophes] – Loss ratio
    7. Accident year loss ratio, as adjusted (AYLR ex-CAT) = [Loss and loss adjustment expenses incurred – CATs – PYD] ÷ [NPE +/(-) Reinstatement premiums related to catastrophes +/(-) Prior year premiums + Adjustment for ceded premium under reinsurance contracts related to prior accident years]
    8. Accident year combined ratio, as adjusted (AYCR ex-CAT) = AYLR ex-CAT + Expense ratio
    9. Prior year development net of reinsurance and prior year premiums = [Loss and loss adjustment expenses incurred – CATs – PYD] ÷ [NPE +/(-) Reinstatement premiums related to catastrophes +/(-) Prior year premiums] – Loss ratio – CATs and reinstatement premiums ratio.

    Premiums and deposits: includes direct and assumed amounts received and earned on traditional life insurance policies, group benefit policies and life‑contingent payout annuities, as well as deposits received on universal life, investment‑type annuity contracts, Federal Home Loan Bank (FHLB) funding agreements and mutual funds. We believe the measure of premiums and deposits is useful in understanding customer demand for our products, evolving product trends and our sales performance period over period.

    Results from discontinued operations are excluded from all of these measures.

    American International Group, Inc. (AIG) is a leading global insurance organization. AIG member companies provide a wide range of property casualty insurance, life insurance, retirement solutions and other financial services to customers in approximately 70 countries and jurisdictions. These diverse offerings include products and services that help businesses and individuals protect their assets, manage risks and provide for retirement security. AIG common stock is listed on the New York Stock Exchange.

    Additional information about AIG can be found at www.aig.com | YouTube: www.youtube.com/aig | Twitter: @AIGinsurance www.twitter.com/AIGinsurance | LinkedIn: www.linkedin.com/company/aig. These references with additional information about AIG have been provided as a convenience, and the information contained on such websites is not incorporated by reference into this press release.

    AIG is the marketing name for the worldwide property-casualty, life and retirement and general insurance operations of American International Group, Inc. For additional information, please visit our website at www.aig.com. All products and services are written or provided by subsidiaries or affiliates of American International Group, Inc. Products or services may not be available in all countries and jurisdictions, and coverage is subject to underwriting requirements and actual policy language. Non-insurance products and services may be provided by independent third parties. Certain property-casualty coverages may be provided by a surplus lines insurer. Surplus lines insurers do not generally participate in state guaranty funds, and insureds are therefore not protected by such funds.

    American International Group, Inc.

    Selected Financial Data and Non-GAAP Reconciliation

    ($ in millions, except per common share data)

     

    Reconciliations of Adjusted Pre-tax and After-tax Income

     

    Three Months Ended June 30,

     

    2021

     

    2022

     

     

     

     

    Total Tax

     

    Non-

     

     

     

     

     

     

    Total Tax

    Non-

     

     

     

     

     

     

    (Benefit)

     

    controlling

     

     

     

     

     

     

    (Benefits)

     

    controlling

     

    After

     

     

    Pre-tax

     

    Charge

     

    Interests(d)

     

    Tax

     

     

    Pre-tax

     

    Charge

     

    Interests(d)

     

    Tax

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Pre-tax income/net income, including noncontrolling interests

    $

    147

    $

    (3)

    $

    $

    150

     

    $

    4,321

    $

    928

    $

    $

    3,392

    Noncontrolling interests

     

     

     

     

     

    (51)

     

    (51)

     

     

     

     

     

     

    (356)

     

    (356)

    Pre-tax income/net income attributable to AIG

     

    147

     

    (3)

     

    (51)

     

    99

     

     

    4,321

     

    928

     

    (356)

     

    3,036

    Dividends on preferred stock

     

     

     

     

     

     

     

    8

     

     

     

     

     

     

     

     

    8

    Net income attributable to AIG common shareholders

     

     

     

     

     

     

     

    91

     

     

     

     

     

     

     

     

    3,028

    Adjustments:

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Changes in uncertain tax positions and other tax adjustments(a)

     

     

     

    (35)

     

     

    35

     

     

     

     

    (3)

     

     

    3

    Deferred income tax valuation allowance releases(b)

     

     

     

    25

     

     

    (25)

     

     

     

     

    17

     

     

    (17)

    Changes in fair value of securities used to hedge guaranteed living benefits

     

    (13)

     

    (2)

     

     

    (11)

     

     

    (10)

     

    (2)

     

     

    (8)

    Changes in benefit reserves and DAC, VOBA and DSI related to net realized gains (losses)

     

    (120)

     

    (25)

     

     

    (95)

     

     

    128

     

    27

     

     

    101

    Changes in the fair value of equity securities

     

    13

     

    3

     

     

    10

     

     

    30

     

    6

     

     

    24

    Loss on extinguishment of debt

     

    106

     

    23

     

     

    83

     

     

    299

     

    63

     

     

    236

    Net investment income on Fortitude Re funds withheld assets

     

    (507)

     

    (107)

     

     

    (400)

     

     

    (188)

     

    (40)

     

     

    (148)

    Net realized (gains) losses on Fortitude Re funds withheld assets

     

    (173)

     

    (37)

     

     

    (136)

     

     

    86

     

    19

     

     

    67

    Net realized (gains) losses on Fortitude Re funds withheld embedded derivative

     

    2,056

     

    431

     

     

    1,625

     

     

    (2,776)

     

    (583)

     

     

    (2,193)

    Net realized (gains) losses(c)

     

    59

     

    17

     

     

    42

     

     

    (620)

     

    (154)

     

     

    (466)

    Loss from discontinued operations

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    1

    Net loss on divestitures

     

    1

     

     

     

    1

     

     

    1

     

    1

     

     

    Non-operating litigation reserves and settlements

     

     

     

     

     

     

    (4)

     

    (1)

     

     

    (3)

    Favorable prior year development and related amortization changes ceded under retroactive reinsurance agreements

     

    (65)

     

    (14)

     

     

    (51)

     

     

    (144)

     

    (30)

     

     

    (114)

    Net loss reserve discount charge

     

    22

     

    5

     

     

    17

     

     

    14

     

    4

     

     

    10

    Integration and transaction costs associated with acquiring or divesting businesses

     

    35

     

    7

     

     

    28

     

     

    38

     

    8

     

     

    30

    Restructuring and other costs

     

    126

     

    26

     

     

    100

     

     

    175

     

    37

     

     

    138

    Non-recurring costs related to regulatory or accounting changes

     

    21

     

    4

     

     

    17

     

     

    9

     

    2

     

     

    7

    Noncontrolling interests(d)

     

     

     

     

     

     

     

     

     

     

     

     

    283

     

    283

    Adjusted pre-tax income/Adjusted after-tax income attributable to AIG common shareholders

    $

    1,708

    $

    318

    $

    (51)

    $

    1,331

     

    $

    1,359

    $

    299

    $

    (73)

    $

    979

    Reconciliations of Adjusted Pre-tax and After-tax Income

     

    Six Months Ended June 30,

     

    2021

     

    2022

     

     

     

     

    Total Tax

     

    Non-

     

     

     

     

     

     

    Total Tax

     

    Non-

     

     

     

     

     

     

    (Benefit)

     

    controlling

     

    After

     

     

     

     

    (Benefit)

     

    controlling

     

    After

     

     

    Pre-tax

     

    Charge

     

    Interests(d)

     

    Tax

     

     

    Pre-tax

     

    Charge

     

    Interests(d)

     

    Tax

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Pre-tax income/net income, including noncontrolling interests

    $

    4,875

    $

    795

    $

    $

    4,080

     

    $

    10,156

    $

    2107

    $

    $

    8,048

    Noncontrolling interests

     

     

     

     

     

    (105)

     

    (105)

     

     

     

     

     

     

    (752)

     

    (752)

    Pre-tax income/net income attributable to AIG

     

    4,875

     

    795

     

    (105)

     

    3,975

     

     

    10,156

     

    2,107

     

    (752)

     

    7,296

    Dividends on preferred stock

     

     

     

     

     

     

     

    15

     

     

     

     

     

     

     

     

    15

    Net income attributable to AIG common shareholders

     

     

     

     

     

     

     

    3,960

     

     

     

     

     

     

     

     

    7,281

    Adjustments:

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Changes in uncertain tax positions and other tax adjustments(a)

     

     

     

    866

     

     

    (866)

     

     

     

     

    88

     

     

    (88)

    Deferred income tax valuation allowance (releases) charges(b)

     

     

     

    (661)

     

     

    661

     

     

     

     

    23

     

     

    (23)

    Changes in fair value of securities used to hedge guaranteed living benefits

     

    (35)

     

    (7)

     

     

    (28)

     

     

    (23)

     

    (5)

     

     

    (18)

    Changes in benefit reserves and DAC, VOBA and DSI related to net realized gains (losses)

     

    83

     

    18

     

     

    65

     

     

    401

     

    84

     

     

    317

    Changes in the fair value of equity securities

     

    (9)

     

    (2)

     

     

    (7)

     

     

    57

     

    12

     

     

    45

    Loss on extinguishment of debt

     

    98

     

    21

     

     

    77

     

     

    299

     

    63

     

     

    236

    Net investment income on Fortitude Re funds withheld assets

     

    (993)

     

    (209)

     

     

    (784)

     

     

    (479)

     

    (101)

     

     

    (378)

    Net realized (gains) losses on Fortitude Re funds withheld assets

     

    (346)

     

    (73)

     

     

    (273)

     

     

    226

     

    48

     

     

    178

    Net realized gains on Fortitude Re funds withheld embedded derivative

     

    (326)

     

    (68)

     

     

    (258)

     

     

    (6,094)

     

    (1,280)

     

     

    (4,814)

    Net realized gains(c)

     

    (568)

     

    (128)

     

     

    (440)

     

     

    (1,808)

     

    (435)

     

     

    (1,373)

    Loss from discontinued operations

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    1

    Net gain on divestitures

     

    (6)

     

    (1)

     

     

    (5)

     

     

    (39)

     

    (8)

     

     

    (31)

    Non-operating litigation reserves and settlements

     

     

     

     

     

     

    (38)

     

    (8)

     

     

    (30)

    Favorable prior year development and related amortization changes ceded under retroactive reinsurance agreements

     

    (84)

     

    (18)

     

     

    (66)

     

     

    (144)

     

    (30)

     

     

    (114)

    Net loss reserve discount benefit

     

    (10)

     

    (2)

     

     

    (8)

     

     

    (6)

     

    (1)

     

     

    (5)

    Integration and transaction costs associated with acquiring or divesting businesses

     

    44

     

    9

     

     

    35

     

     

    84

     

    18

     

     

    66

    Restructuring and other costs

     

    200

     

    42

     

     

    158

     

     

    268

     

    56

     

     

    212

    Non-recurring costs related to regulatory or accounting changes

     

    41

     

    8

     

     

    33

     

     

    13

     

    3

     

     

    10

    Noncontrolling interests(d)

     

     

     

     

     

     

     

     

     

     

     

     

    581

     

    581

    Adjusted pre-tax income/Adjusted after-tax income attributable to AIG common shareholders

    $

    2,964

    $

    590

    $

    (105)

    $

    2,254

     

    $

    2,873

    $

    634

    $

    (171)

    $

    2,053

    (a) Six months ended June 30, 2021 includes the completion of audit activity by the Internal Revenue Service.
    (b) Six months ended June 30, 2021 includes an increase in the valuation allowance against a portion of certain tax attribute carryforwards of AIG’s U.S. federal consolidated income tax group, as well as net valuation allowance release in certain foreign jurisdictions.
    (c) Includes all net realized gains and losses except earned income (periodic settlements and changes in settlement accruals) on derivative instruments used for non-qualifying (economic) hedging or for asset replication and net realized gains and losses on Fortitude Re funds withheld assets.
    (d) For the three and six months ended June 30, 2022, noncontrolling interests include Blackstone’s 9.9 percent equity stake in Corebridge.

    Summary of Key Financial Metrics

     

     

     

    Three Months Ended June 30,

     

     

     

    Six Months Ended June 30,

     

    Earnings per common share:

     

    2021

     

    2022

    % Inc. (Dec.)

     

     

     

    2021

     

    2022

    % Inc. (Dec.)

     

    Basic

     

     

     

     

     

     

     

     

     

     

     

     

     

    Income from continuing operations

    $

    0.11

    $

    3.83

    NM

    %

     

    $

    4.58

    $

    9.06

    97.8

    %

    Income from discontinued operations

     

     

    NM

     

     

     

     

    NM

     

    Net income attributable to AIG common shareholders

    $

    0.11

    $

    3.83

    NM

     

     

    $

    4.58

    $

    9.06

    97.8

     

    Diluted

     

     

     

     

     

     

     

     

     

     

     

     

     

    Income from continuing operations

     

    0.11

    $

    3.78

    NM

     

     

     

    4.53

    $

    8.95

    97.6

     

    Income from discontinued operations

     

     

    NM

     

     

     

     

    NM

     

    Net income attributable to AIG common shareholders

    $

    0.11

    $

    3.78

    NM

     

     

    $

    4.53

    $

    8.95

    97.6

     

    Adjusted after-tax income attributable to AIG common shareholders per diluted share (a)

    $

    1.52

    $

    1.19

    (21.7)

    %

     

    $

    2.58

    $

    2.50

    (3.1)

    %

    Weighted average shares outstanding:

     

     

     

     

     

     

     

     

     

     

     

     

     

    Basic

     

    862.9

     

    790.9

     

     

     

     

    865.5

     

    803.5

     

     

    Diluted

     

    872.9

     

    800.7

     

     

     

     

    874.6

     

    813.3

     

     

    (a) For the three- and six-month periods ended June 30, 2022, an option for Blackstone to exchange all or a portion of its ownership interest in Corebridge for AIG common shares was dilutive for the calculation of Adjusted after-tax income per common share attributable to AIG common shareholders. The dilutive impact was an additional 42,572,031 shares for both periods.

    Reconciliation of Book Value per Common Share

    As of period end:

     

    June 30, 2021

     

     

    December 31, 2021

     

     

    March 31, 2022

     

     

    June 30, 2022

    Total AIG shareholders’ equity

    $

    66,083

     

    $

    65,956

     

    $

    55,944

     

    $

    45,344

    Less: Preferred equity

     

    485

     

     

    485

     

     

    485

     

     

    485

    Total AIG common shareholders’ equity (a)

     

    65,598

     

     

    65,471

     

     

    55,459

     

     

    44,859

    Less: Deferred tax assets (DTA)*

     

    7,374

     

     

    5,221

     

     

    4,816

     

     

    4,582

    Less: Accumulated other comprehensive income (AOCI)

     

    10,209

     

     

    6,687

     

     

    (5,900)

     

     

    (17,656)

    Add: Cumulative unrealized gains and losses related to Fortitude Re Funds withheld assets

     

    3,341

     

     

    2,791

     

     

    48

     

     

    (2,223)

    Subtotal: AOCI plus cumulative unrealized gains and losses related to Fortitude Re funds withheld assets

     

    6,868

     

     

    3,896

     

     

    (5,948)

     

     

    (15,433)

    Total adjusted common shareholders’ equity (b)

    $

    51,356

     

    $

    56,354

     

    $

    56,591

     

    $

    55,710

    Less: Intangible assets:

     

     

     

     

     

     

     

     

     

     

     

    Goodwill

     

    4,083

     

     

    4,056

     

     

    4,009

     

     

    3,935

    Value of business acquired

     

    121

     

     

    111

     

     

    107

     

     

    99

    Value of distribution channel acquired

     

    477

     

     

    458

     

     

    448

     

     

    438

    Other intangibles

     

    305

     

     

    300

     

     

    291

     

     

    289

    Total intangible assets

     

    4,986

     

     

    4,925

     

     

    4,855

     

     

    4,761

    Total adjusted tangible common shareholders’ equity (c)

    $

    46,370

     

    $

    51,429

     

    $

    51,736

     

    $

    50,949

    Total common shares outstanding (d)

     

    854.9

     

     

    818.7

     

     

    800.2

     

     

    771.3

    As of period end:

     

    June 30,

    2021

    % Inc.

    (Dec.)

     

     

    December 31,

    2021

    % Inc.

    (Dec.)

     

     

    March 31,

    2022

    % Inc.

    (Dec.)

     

     

    June 30,

    2022

    Book value per common share (a÷d)

    $

    76.73

    (24.2)

    %

    $

    79.97

    (27.3)

    %

    $

    69.30

    (16.1)

    %

    $

    58.16

    Adjusted book value per common share (b÷d)

     

    60.07

    20.2

     

     

    68.83

    4.9

     

     

    70.72

    2.1

     

     

    72.23

    Adjusted tangible book value per common share (c÷d)

     

    54.24

    21.8

     

     

    62.82

    5.2

     

     

    64.65

    2.2

     

     

    66.06

    Reconciliation of Return On Common Equity

     

     

    Three Months Ended June 30,

     

     

     

    2021

     

     

    2022

     

    Annualized net income (loss) attributable to AIG common shareholders (a)

    $

    364

     

    $

    12,112

     

    Annualized adjusted after-tax income attributable to AIG common shareholders (b)

    $

    5,324

     

    $

    3,916

     

    Average AIG Common Shareholders’ equity (c)

    $

    63,896

     

    $

    50,159

     

    Less: Average DTA*

     

    7,457

     

     

    4,699

     

    Less: Average AOCI

     

    8,338

     

     

    (11,778)

     

    Add: Average cumulative unrealized gains and losses related to Fortitude Re funds withheld assets

     

    2,794

     

     

    (1,088)

     

    Subtotal: AOCI plus cumulative unrealized gains and losses related to Fortitude Re funds withheld assets

     

    5,544

     

     

    (10,690)

     

    Average adjusted common shareholders’ equity (d)

    $

    50,895

     

    $

    56,150

     

     

     

     

     

     

     

     

    ROCE (a÷c)

     

    0.6

    %

     

    24.1

    %

    Adjusted return on common equity (b÷d)

     

    10.5

    %

     

    7.0

    %

    * Represents deferred tax assets only related to U.S. net operating loss and foreign tax credit carryforwards on a U.S. GAAP basis and excludes other balance sheet deferred tax assets and liabilities.

    Reconciliation of Net Investment Income

     

     

    Three Months Ended

     

     

    June 30,

     

     

    2021

     

     

    2022

    Net Investment Income per Consolidated Statements of Operations

    $

    3,675

     

    $

    2,604

    Changes in fair value of securities used to hedge guaranteed living benefits

     

    (13)

     

     

    (13)

    Changes in the fair value of equity securities

     

    13

     

     

    30

    Net investment income on Fortitude Re funds withheld assets

     

    (507)

     

     

    (188)

    Net realized gains (losses) related to economic hedges and other

     

    14

     

     

    71

    Total Net Investment Income – APTI Basis

    $

    3,182

     

    $

    2,504

    Net Premiums Written – Change in Constant Dollar

     

    Three Months Ended June 30, 2022

     

     

     

     

     

     

     

    North

     

     

     

     

     

     

     

     

    Global –

     

    Global –

     

    America

     

    International –

     

    General

     

    Commercial

     

    Personal

     

    Commercial

     

    Commercial

     

    Personal

     

    General Insurance

    Insurance

     

    Lines

     

    Insurance

     

    Lines

     

    Lines

     

    Insurance

     

    Foreign exchange effect on worldwide premiums:

     

     

     

     

     

     

     

     

     

     

     

     

    premiums:

     

     

     

     

     

     

     

     

     

     

     

     

    Change in net premiums written

     

     

     

     

     

     

     

     

     

     

     

     

    Increase (decrease) in original currency

    5

    %

    8

    %

    (4)

    %

    10

    %

    5

    %

    (4)

    %

    Foreign exchange effect

    (5)

     

    (3)

     

    (7)

     

     

    (6)

     

    (9)

     

    Increase (decrease) as reported in U.S. dollars

    %

    5

    %

    (11)

    %

    10

    %

    (1)

    %

    (13)

    %

    Reconciliations of Accident Year Loss and Accident Year Combined Ratios, as Adjusted

     

     

     

     

     

     

     

    Three Months Ended

     

    June 30,

     

    2018

     

    2021

     

    2022

    Total General Insurance

     

     

     

     

     

    Combined ratio

    101.3

     

    92.5

     

    87.4

    Catastrophe losses and reinstatement premiums

    (2.3)

     

    (2.1)

     

    (1.8)

    Prior year development, net of reinsurance and prior year premiums

    0.8

     

    0.7

     

    2.9

    Adjustments for ceded premium under reinsurance contracts and other

    1.2

     

     

    Accident year combined ratio, as adjusted

    101.0

     

    91.1

     

    88.5

     

     

     

     

     

     

    North America

     

     

     

     

     

    Combined ratio

     

     

    93.7

     

    86.3

    Catastrophe losses and reinstatement premiums

     

     

    (2.9)

     

    (1.7)

    Prior year development, net of reinsurance and prior year premiums

     

     

    1.6

     

    5.3

    Accident year combined ratio, as adjusted

     

     

    92.4

     

    89.9

     

     

     

     

     

     

    North America – Commercial Lines

     

     

     

     

     

    Combined ratio

     

     

    93.0

     

    83.6

    Catastrophe losses and reinstatement premiums

     

     

    (2.9)

     

    (1.9)

    Prior year development, net of reinsurance and prior year premiums

     

     

    1.1

     

    6.5

    Accident year combined ratio, as adjusted

     

     

    91.2

     

    88.2

     

     

     

     

     

     

    North America – Personal Insurance

     

     

     

     

     

    Combined ratio

     

     

    98.1

     

    102.3

    Catastrophe losses and reinstatement premiums

     

     

    (3.0)

     

    (0.5)

    Prior year development, net of reinsurance and prior year premiums

     

     

    5.0

     

    (2.1)

    Accident year combined ratio, as adjusted

     

     

    100.1

     

    99.7

     

     

     

     

     

     

    International

     

     

     

     

     

    Combined ratio

     

     

    91.8

     

    88.5

    Catastrophe losses and reinstatement premiums

     

     

    (1.5)

     

    (2.0)

    Prior year development, net of reinsurance and prior year premiums

     

     

    (0.1)

     

    0.7

    Accident year combined ratio, as adjusted

     

     

    90.2

     

    87.2

     

     

     

     

     

     

    International – Commercial Lines

     

     

     

     

     

    Combined ratio

     

     

    88.7

     

    82.4

    Catastrophe losses and reinstatement premiums

     

     

    (1.4)

     

    (2.3)

    Prior year development, net of reinsurance and prior year premiums

     

     

    (0.4)

     

    1.3

    Accident year combined ratio, as adjusted

     

     

    86.9

     

    81.4

     

     

     

     

     

     

    International – Personal Insurance

     

     

     

     

     

    Loss ratio

     

     

    55.2

     

    56.4

    Catastrophe losses and reinstatement premiums

     

     

    (1.6)

     

    (1.6)

    Prior year development, net of reinsurance and prior year premiums

     

     

    0.4

     

    (0.1)

    Accident year loss ratio, as adjusted

     

     

    54.0

     

    54.7

     

     

     

     

     

     

    Combined ratio

     

     

    95.2

     

    96.9

    Catastrophe losses and reinstatement premiums

     

     

    (1.6)

     

    (1.6)

    Prior year development, net of reinsurance and prior year premiums

     

     

    0.4

     

    (0.1)

    Accident year combined ratio, as adjusted

     

     

    94.0

     

    95.2

     

     

     

     

     

     

    Global – Commercial Insurance

     

     

     

     

     

    Combined ratio

    104.5

     

    91.1

     

    83.1

    Catastrophe losses and reinstatement premiums

    (3.3)

     

    (2.2)

     

    (2.1)

    Prior year development, net of reinsurance and prior year premiums

    2.6

     

    0.4

     

    4.3

    Adjustments for ceded premium under reinsurance contracts and other

    2.3

     

     

    Accident year combined ratio, as adjusted

    106.1

     

    89.3

     

    85.3

    Reconciliation of General Insurance Return on Adjusted Segment Common Equity

     

     

     

     

     

     

     

     

    Three Months Ended

     

     

    June 30,

     

     

     

    2021

     

     

    2022

     

     

     

     

     

     

     

     

    Adjusted pre-tax income

    $

    1,194

     

    $

    1,257

     

    Interest expense on attributed financial debt

     

    147

     

     

    149

     

    Adjusted pre-tax income including attributed interest expense

     

    1,047

     

     

    1,108

     

    Income tax expense

     

    263

     

     

    254

     

    Adjusted after-tax income

     

    784

     

     

    854

     

    Dividends declared on preferred stock

     

    3

     

     

    3

     

    Adjusted after-tax income attributable to common shareholders

    $

    781

     

    $

    851

     

     

     

     

     

     

     

     

    Ending adjusted segment common equity

    $

    25,473

     

    $

    30,078

     

    Average adjusted segment common equity

    $

    25,369

     

    $

    28,334

     

    Return on adjusted segment common equity

     

    12.3

    %

     

    12.0

    %

     

     

     

     

     

     

     

    Total segment shareholder’s equity

    $

    26,308

     

    $

    25,574

     

    Less: Preferred equity

     

    197

     

     

    210

     

    Total segment common equity

     

    26,111

     

     

    25,364

     

    Less: Accumulated other comprehensive income (AOCI)

     

    849

     

     

    (5,214)

     

    Add: Cumulative unrealized gains and losses related to Fortitude Re funds withheld assets

     

    211

     

     

    (500)

     

    Subtotal: AOCI plus cumulative unrealized gains and losses related to Fortitude Re funds withheld assets

     

    638

     

     

    (4,714)

     

    Total adjusted segment common equity

    $

    25,473

     

    $

    30,078

     

    Reconciliations of Premiums and Deposits

     

     

     

     

     

     

     

    Three Months Ended

     

    June 30,

     

     

    2021

     

     

    2022

    Individual Retirement:

     

     

     

     

     

    Premiums

    $

    32

     

    $

    57

    Deposits

     

    3,949

     

     

    3,566

    Other

     

    (3)

     

     

    (3)

    Premiums and deposits

    $

    3,978

     

    $

    3,620

     

     

     

     

     

     

    Group Retirement:

     

     

     

     

     

    Premiums

    $

    4

     

    $

    5

    Deposits

     

    2,251

     

     

    1,767

    Other

     

     

     

    Premiums and deposits

    $

    2,255

     

    $

    1,772

     

     

     

     

     

     

    Life Insurance:

     

     

     

     

     

    Premiums

    $

    532

     

    $

    561

    Deposits

     

    409

     

     

    388

    Other

     

    220

     

     

    208

    Premiums and deposits

    $

    1,161

     

    $

    1,157

     

     

     

     

     

     

    Institutional Markets:

     

     

     

     

     

    Premiums

    $

    1,077

     

    $

    496

    Deposits

     

    559

     

     

    46

    Other

     

    5

     

     

    8

    Premiums and deposits

    $

    1,641

     

    $

    550

     

     

     

     

     

     

    Total Life and Retirement:

     

     

     

     

     

    Premiums

    $

    1,645

     

    $

    1,119

    Deposits

     

    7,168

     

     

    5,767

    Other

     

    222

     

     

    213

    Premiums and deposits

    $

    9,035

     

    $

    7,099

    Reconciliation of Life and Retirement Return on Adjusted Segment Common Equity

     

     

     

     

     

     

     

     

     

    Three Months Ended

     

     

    June 30,

     

     

     

    2021

     

     

    2022

     

     

     

     

     

     

     

     

    Adjusted pre-tax income

    $

    1,124

     

    $

    563

     

    Interest expense on attributed financial debt

     

    74

     

     

    68

     

    Adjusted pre-tax income including attributed interest expense

     

    1,050

     

     

    495

     

    Income tax expense

     

    211

     

     

    95

     

    Adjusted after-tax income

     

    839

     

     

    400

     

    Dividends declared on preferred stock

     

    2

     

     

    2

     

    Adjusted after-tax income attributable to common shareholders

    $

    837

     

    $

    398

     

     

     

     

     

     

     

     

    Ending adjusted segment common equity

    $

    20,689

     

    $

    20,537

     

    Average adjusted segment common equity

    $

    20,458

     

    $

    20,891

     

    Return on adjusted segment common equity

     

    16.4

    %

     

    7.6

    %

     

     

     

     

     

     

     

    Total segment shareholder’s equity

    $

    29,558

     

    $

    11,546

     

    Less: Preferred equity

     

    139

     

     

    147

     

    Total segment common equity

     

    29,419

     

     

    11,399

     

    Less: Accumulated other comprehensive income (AOCI)

     

    11,860

     

     

    (10,861)

     

    Add: Cumulative unrealized gains and losses related to Fortitude Re funds withheld assets

     

    3,130

     

     

    (1,723)

     

    Subtotal: AOCI plus cumulative unrealized gains and losses related to Fortitude Re funds withheld assets

     

    8,730

     

     

    (9,138)

     

    Total adjusted segment common equity

    $

    20,689

     

    $

    20,537

     

     

     

    Contacts

    Quentin McMillan (Investors): quentin.mcmillan@aig.com
    Claire Talcott (Media): claire.talcott@aig.com

    Originally Posted at Business Wire on August 8, 2022 by American International Group, Inc.

    Categories: Industry Articles
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